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4/20/2012 10:30AM

Unions Reach Agreement With US Air on Merger

Paul Vigna and John Shipman talk to Jack Nicas about unions reaching an agreement with US Air on its merger with American Airlines, and Jonathan Cheng discusses investors' hunger for IPO following Splunk's launch. Photo: Reuters.

This transcript has been automatically generated and may not be 100% accurate.

I ... the ... here in York we got some earnings this morning ... you know like a continuation war so yesterday afternoon will for the Market ranch and all ... that some hot tech IPO's to talk about as well ... McDonald's on Calliope the thing is just spinning and control Argentina ... for that in more than half an hour near forty on the markets of the morning of the mine Paul vignette ... joined as I am on Fridays when Mr John Shipman should minority today um fantastical you are ... yes it ... into through Friday it's Friday after a long week really for long we can have the earnings week ridiculous but let's start with some breaking news just breaking news here that leaders on American Airlines Jack Nicas in Chicago ... Jetstar is more and ... more ... to ... do with the intention unsterilized swooping in and getting into agreements with American Eagle and unions that was going on in Europe ... there is a major step ... in US Airways question essentially ... force a merger with American Airlines' day it's one or ... two dollars jeans this morning announced ... that they don't agree on terms with US Airways in the two airlines were to merge ... onto some interest in changing the unions for weeks now on American Airlines is still very hesitant ... and ... and they're actually going on Monday today it's the core of the class American Airlines employees jobs ... so ... it's ... a good job ... so right now I will we get to deal with unions are saying that ... indeed you ... get a murderer with us here is that they could actually seen that nearly half of the thirteen thousand jobs as American Airlines wants to cut ... and a new series is saying ... that they did ... a trio of billion and ... more ... in additional revenue through the merger ... so tosses in China due to the unions ... and now they are fully on board now ... U S there is enough to convince the rest of American Airlines creditors before the murders happened also to go ... to American Airlines or directors in the know that's the question is asked is Jackie have any sense about how the other creditors are leaning ... um now that maybe that the unions are on ... the on board with a potential on US Airways merger ... it's really tough decisions when they beat us ... you know ... futures for this ... but he still has the ... hat to convince ... several other ... members there's that is ... essentially a number of traders me ... one ... of the members the ... pension benefit guarantee for the state today is that ... either there means you put your putting together supporting a stronger line that was or jobs ... preserving jobs it seems like the mergers the way to go so ... I'm ... obviously there's an attractive proposition in US Airways ... and going to make their case all the creditors ... and will see up on a certainty that ... they supported ... things is going to ... the US Airways stock is down ... two percent to do with the show started ... I'm from from from the US Airways obvious and trying to ... force this merger is this now this are represented on backdoor way for them to get this murder ... because you know American Airlines management said no ... Airlines is used and it is not interested ... during the day it is that they're all years once they had her stand alone airline from ... their decor ... but I you know us there is that ... we reported today today's Journal that ... I'm ... there are actually having internal discussions about whether or not try to take a back room into ... the creditors committee ... independently whether or not to I have a sort of full frontal ... of merger proposition to the four directors in a market as well ... by that is unclear how to ... proceed ... just yet ... but this is amazed at least they know they have the support of employees ... and and they're very likely they are there are probably talking to advisers of ... other creditors is low ... the question about the strength of US Airways now to our are they on pretty solid financial ground now Jack or ... you know are are they really common in the Avici they're a better position than Amour but um ... you know it ... are they really meant a good spot to be Obel to ... pull off this merger can and do whatever consolidation need to do and come under that Dom much stronger ... there is is is on song financial footing ... they can certainly survive ... and ... they are turning in a small profit but ... it is impossible but it seems as possible while industry analyst at US Airways to was due to his house in Wonderland not complete its merger with a loss in ... the last big merger in your minds to the scene and are blessed United Continental ... US Airways is really going to struggle to keep up with ... the image I United and Delta ... and American that were ... made to stand alone airline will also be quite strong ... bought ... for American and US Airways to compete with United and Delta ... both among many industry analysts say they need to merge ... I ... believe that I think during much Jack ... Coleman struggle in the world is not ... if we ... were like the map is very impressive ... moving on ... the one who ... prefer the silly ... we had the of the social media IPO we've now it seems to me we really public companies ... hi Tech B D and that is the story Jonathan Cheng is here with ... I can share this with the names belong to I think of the Ospel leaking I guess is on the right to do ... it this is the raging company you are going to explain to a spectator and how to best ideas for what I still couldn't figure out a kitty me it's not that clear ... but ... the IPO as companies like yesterday when three point three up thirty percent more let's let's look yesterday for sure um that basically what the company does anyone with a G mail account or wait for you know ... the hard drive or not but you know that ... data storage space is just cheaper and cheaper cheaper and companies like ... chicken Amazon or need a accompaniment that the clocks tons of data on ... what consumers are doing a beak like every you know PJs you they have all the data on the other sock and all that away ... the question is how do you take all that didn't make it useful ... turning ... more profits ... and that's what company wants one comes and the andthe and ... not a household name ... out you could love them and win over run with the wind was like the linked in with a group of losing to put all of those are sort of consumer facing are you know really due to the limit or list of the social media game and utility group on with it the look I mean what they can quickly ... a company likes wanted to write group when they are much more of what they're selling their wares to decompress ... far from ordinary people like us yes we we we don't deal with squad ... to offer ... up the dough at all but ... how but sadly you don't ... but this will lead many to be made there and that yesterday was on the stock more than double finance ... again not just ... underscores the appetite of investors seem to have you clearly ... there's a little bit more cautious as the markets ... we saw yesterday but it probably we were down but ... swung more than double the thinking of the these these these tech IPO's ... you are you're seeing is almost insatiable appetite for money regardless of their long-term prospects is companies to remind you move ... a certain period to know ... before two thousand and fourteen ... the reading before that though it is interesting to me about a lot ... to do that for some of them ... in a swamp twenty oh ... he ... used a pretty low ... I'd get on with it and use these is the isthe II ... but still I'm a lot of high tech ones lot of publicity lot of moving around ... now ... and ... what is it about the high tech company ... well ... I think what happened was after the tech bubble ... Shawn was referring to ... the was a lot of consolidation ... in the second is to use a lot it means that ... by creamy not deserve to be in the first place ... yet we don't ... out of the system you know and and ... that what was seen as a second wave as the Internet does get more much more ... you're seeing social media makes it makes on offense and then just that we use computers Interactive's family that we do ... and the like and and ... see a lot of applications now against what is it is ... would seem to be ... you know related to the settlement does not bestow it on social media either for ... the week NRG dance as this is what with the stock to the key thing is that they hold the prospect of very rapid earnings growth and as what ... was so special in the eyes of investors ... on with the end of the early days of the tech bubble ... was the prospects that they were to be a blogroll ... of the earnings incredibly fast ... and I think that's what's attracting people to these names to ... the question is ... there when Neena started to get a real earnings and that the interesting thing about swapping thing though is that the CEO of this company ... aam as the asthe a pre good pedigree he sold all of the software company Oracle ... and Dom says not so much to write exactly and he's been around the clock a little bit here ... and of but it's and it's you know it's interesting um ... Mitch what ... you get the companies like IBM MEMC ... and perhaps even in the work all that ... I wanna be in that area too so you have to wonder ... you know it's not an incredibly defensible motive is that Howard to this use to us ... anticipation of these two inquiry into the Facebook IPO ... what it's like you would you want to be the Facebook IPO already one of the the high-tech Leo loves the social media really become the IPO's just before Facebook in the paddock area ... that um actually ... worth ... or promise when you compare with the look at that ... time that seemed to Jonathan Cheng the very much to factor in the markets ... when we returned we wanna talk about the markets will ... turn around mid afternoon yesterday ... seems to be continuing ... Dow Jones Industrial Average granddad the index is up on her fourteen points ... big turnaround from yesterday afternoon Laura mind are is here with us ... last night here's into fences to get on the show in the style also called the morning wore our new ... bank that police had PC get up this early for us to note that ... I would not get up this early for me ... I the eye and I get a thrill and intent on ... every and ... a given the can with that ... with the things I allow nineteen NNN being led by families in percentage terms bi Micra soft with just plain sad unusual of twenty five percent the last intact ... and ten earnings from backed company as well as general acting and thinking ... I'm ... improving sentiment credited to them ... still slow but about what why people are so enthusiastic about Micra soft ... well our main at this company has had a lot and found restaurants and many of the last couple years so ... I'm like I'm ninety nine cents until Wednesday Dell but in ... our it staff ... and and and and some some positive elements ... and I think in general with earnings on to new Last IC companies beating expectations as higher than average rate and a buy with that very well and we know aam but to ... and he and earning the raise about eight percent that's purses and sixty percent average sale as yet ... why am I you know and and a wave of companies that are doing better ... in and aam but I'm getting and an outlook ... that ... aam and a unit and turned on the market on a dime ... but as we seen this weekend he really is what you're saying we can ... we now have a down day on one of the key earnings gains next week it if ... that happens you still attorney Don Miller and John P Jones to ... yesterday of Tunis on the Dow ended up down yesterday ... but it was down sharply ... early afternoon and it needs all the The reversal ... came back with them I was seventy or whatever ... the point he was now all I was there something that happened was or something ... yesterday afternoon ... this in turn sentiment around ... which is kinda sorta The certain technical bounce is ... what to me it seems ... like they are Darst tactical level so that the market is ... bouncing on it and it's been five hundred the old ... um what what an interesting aspects of the worst in in in the selloffs that saw yesterday is an increase in the ... trading volume ... then a week ago and so with the selloff Swissie and Dom that redefine coupled with the rallies the falling still kind of ... tepid ... last week last Thursday when Mark was up on thirteen points five was about seven percent below year on year to date average ... so that's of loot for those who think the following the rules for the Wii U of L a to B opener signals conviction that it's an interesting trying to walk ... I let's move on the spotlight next week to be here before you know it when he's coming ... to play with the need to know ... warm and are still with us here ... ay ay ay differences ... I ... think I think I know what the biggest thing next week is going well we go through this exercise ... what's the biggest thing next week Laura ... I I have to be that bad but there's been a lot of attention at Apple earnings and said that is off the mark and never just because it's such a big chunk of the index is on ... the biggest component of the Nasdaq and data ... and you really can't stand in and ... discount outlets ... attention will be KDDI distraction ... desert sands with Apple to the euro because the stock is ... this the great war on ... so far this year there were naked to their earnings in the earnings will be good of the really have any expectation Alcoa's disappoint his liberally have been the last couple years ... why ... with the expectations so high ... is it possible that ... that the stock sells off arms ... FYI my lightweight and at that but I would play now a We and ... a half then to an end and this complete medical riot ... I'm the last couple weeks then actually an ounce I think late Bommel expense and then yesterday I think it had lots of ... our ... loss or gain more than three percent to three no pass witching day ... though on ... this and then come up and that doesn't skepticism already entered into ... I'm praising Manning not by a lot by ... so I think they can go either way really iam of course you know these little detail from bath body and friend and forecasts and when ... I aam ... when will determine that I've ... had and things of that they are just come out and a little bit so you know many ... who were to look at that meeting Louis what we would be there with them are they doing ... any chain meaning said the press or will the al Wentz a time and he now what ... if you remember in and and and and ... both have the same men chant at the press conference ... the day is ... consumed by ... the Fed and hanging out person reaction or maybe not not much actions haven't written statement ... listen to the updated and GDP forecasts them and ... and and now we get the press conference South ... and and a lot of volatility am ... I wasn't very sensitive to what any any kind now it's about what you know when or where more or less likely to do more quantitative easing ... given this economic recovery which seems to be happening but still has a lot of ... sensitive spots like housing fell ... I'm I'm I'm I'm I came fully prepared to react to it ... yet ... I ... to ... we then the belief that lower think your amateur with a weakened ... peanuts we ... will we come back Argentina's seizure YPF ... store for real squeeze in some Spanish banks in a Mexican company ... Argentina's seizure YPF it's the shockwaves are rippling ... across the ocean the less going north everywhere when the snow was ... going or ... trolley Roth is here with that story told to talk about this and this is ... obviously for a shocking thing when it happened ... who would become interesting is ... the other companies that are being affected by this ... well yesterday most of the Ozarks stage companies can to ... secure a state-run oil from the next move ... it now ... the main Spanish companies are Spain's third-largest bank ... tightening and the construction company ... called sass ... Brian Russell ... they have found ... Cigna in states such as a thirty percent stake ... in Repsol which ... of course is the biggest firm ... the company with exposure to ... the nationalization of YPF ... Repsol has seen its stake in YPF produced ... from Tuesday's seven percent to about six percent ... and down ... and read it in Repsol fashion ranges of thirteen percent stake in Sasa ... as of ... the ... ten percent stake in AMP can access to about ten percent stake in ... general so as well and so ... the value of those states that have gone down ... as ... the share prices of YPF and Repsol ... have collapsed ... so Charlie the enormous that Dom of the Keisha bank that has not written is ... reluctant to write down its the value of its states so far ... um because I think that their rationale was that it was can add and some validity against student Argentina's move on ... how long can they go before they did these Delin ... and other stakeholders go before they recognize the declines in value the States ... that's an excellent question ... I don't know but I think anybody ... really knows not there Repsol is this going to ... trace the nationalization in quarter ... this is still legal ... now ... lots of companies have uncontested ... unilateral contract rates ... in Argentina ... Jia has more pieces in the world a status it ... arbitration ... Laura ... the twenty six ... hundred and forty six than ... any other country ... and even in cases that come as the company's one incident in an unrelated to collect ... so in these cases and read on for years stemming back to Argentina's a ... collapse in two thousand and since that call ... and Dom ... you know the the way that that the government demands that was to impose ... tariffs ... and price caps ... and to the breaking of those contracts then traded in ... legal disputes in ... in companies haven't really had much choice in ... you know ... in in dealing with Argentina because they can't get any when it's forced ... on top obviously the Argentinians felt that this this move was ... something they needed to do work whatever blowback digged ... they wouldn't otherwise but ... what is is going to do their standing in the international community ... you know probably reinforce that it did this stain is ... we really have a pariah state in and the economic and financial ... whole communities ... the truth is Argentina still has renegotiated stay with them ... the Paris Club ... of ... bilateral lenders ... time there's a whole outs from the two thousand won ... although bondholders from two thousand when debt default ... Argentina chance that the federal government issue brought in private capital markets ... lots of companies that I think ... you will now be loathe to ... invest in Argentina they may get some ... you know the Chinese have shown a very strong stomach for investing in places like Africa Venezuela ... Ecuador ... time in terms of lots of private capital gone and Argentina I am seeing now ... OK I tried on thank you very much start talking soon take your ... money you seen a hedge fund advertising in the Super Bowl ... well I know ... but Mikey season that fun advertising yes why Chuck Jaffe is here to tell us ... hedge funds hedge funds advertising shot this photo demonstrates the know why ... what was to see it because it's one of these parts of the JOBS Act that nobody really understood was in there I mean ... I know the JOBS Act is about creating more more work in the fundamental idea is supposed to open a lot of ... private equity we we talked yesterday about crowdfunding which is the micro level ... well one of the things it's also happening is ... that making it easier for hedge funds to reach out ... I thought the higher levels and ... and this one is easy consumers remain in understanding ... now I start to see hedge fund advertising and just imagine ... what would happen ... if say Bernie made off had been allowed to advertise to bring in money at the time when these Ponzi schemer struggling the most ... that's what we're going to ... we are talking about actually seeing hedge funds do like Italy India and China and campaign for back today ... and went on to lead the campaign is talking about sort of ... the pool ... then the paper's something invested this now what is the parking ... well ... I don't think we're talking about when China campaigns ... necessarily but I would be stunned to see ... hedge fund operators decided they wanna pursue something that ... perhaps the financial network allowable or ... audio on WS J dot com or in the Wall Street Journal or on MarketWatch it's accurate because ... although they can only still take accredited investors is not reaching out to everybody because Miller had to have a million dollars or be a little show income of over two hundred thousand ... it is reaching out to folks that maybe would have otherwise credited ... the news coming out that this is that ... finally even if you're not advertising the thing that might be a positive this a strong positive ... is that ... a lot of fund managers ... hedge fund managers ... will put anything on their website that ... is a disclosure they won't really talk to the media or anything else because he could be considered a solicitation ... and that's gonna change under this also ... can get my open things up ... for the time ... but this is definitely a double edge sword ... much earlier than the other day I heard former FCC chairman Arthur Levitt has just been ... tearing into this on this jobs are legislation ... and Dom you that the various protections that investors were gonna lose continued in and his hedge fund on advertising links sounds a little that will really get that fits into that category ... he tells a little more about ... what the what to investors stand to lose with this ... well ... was talking about is the crowd funding side of things are gonna come on MarketWatch right now the story talks about about that issue ... crowdfunding is really ... too ... sure of reaching out at the little lowest level it is ... it is you've got some coffee barista ... who wants to be able to ... help older shopper one happy when they're trying to get funding ... and their use to having ... anyone with the banks are going at reaching out to friends and family and is allied with Mr. into a lot of that without making disclosures ... show about yourself with say the spam emails you get about penny stocks ... and now it will be the email that says hey we all know Joan E she runs the local coffee shop she is looking to go into business ... for just a couple of thousand bucks you can support her and ... you know get a free coffee every Friday for your son thank ... you so ... really when ... it's done some things that will basically make you look more like the Wild West and ... the hope is that ... that that can be ... did not necessarily regulated at least controlled properly that people in the crowd funding business will tell you ... yes there is potential for fraud ... but we don't wanna see it happen cuz it's not good for any mom ... that I meet up with the leave it there ... I think are a few times are able to challenge ... it's ... our pumpkins into jack in MarketWatch ok McDonald's ... before earnings this morning one of the company's of his former opponent ... breakdown for Zynga's borrow Tori came ... and morning fog so silent McDonald's earnings ... the numbers ... really ... that spectacular to me that they were pretty good right ... by especially because the dawn of the kind of lowered expectations Wayne aam last month they said that ... the economic pressures Republican infected first-quarter earnings at Aramith ... expecting ... them to be a not that I'm ... quite as spectacular as they always are ... so I think that everyone in the way ... a lot more in price that despite all these economic headwinds and slowing growth in China ... and ... the issues in your up line despite all that ... McDonald's has ... still been able to beat expectations ... a couple things one beyond what exactly are they selling that's the good of boosting growth as much as it is is that the train scene of the ... fruity swirly useless things are in the coffee coffee on a ordnance sandwiches and a cool ... video for the taking advantage of and which was losing ... market share of the business ... well there's a lot of it ... the change you know in different ... areas of the world and different users ... I'm that McDonald's is stealing customers from that ... a lot of people argue that I'm backing down and if you know that they're in the U coffee chain big in the U S The and ... as McDonald's is common with coffee in the US that's ... possibly been revived instilling customers from that ... other places I mean in time that there are no big competitor with KFC he ... I they have the chicken burger ... and you have a house and are for projects so ... I think I McDonald's ... biggest benefit is just a ... day at ... create local ice Pradaxa ... so wherever there in the world ... the Korea products that will compete with that market ... inching ... we did ... make driven doesn't agree with you know what to what the stakes are so so what the earnings due to the group picture in United States ... was it good quarter for the last ... to look the U S was also impressive ... given that it's such a mature market ... I McDonald's actually it's just aam on their conference call was talking about how ... they are finding ways to increase capacity at peak hours like lunch time ... I'm the kind that day it could potentially see even more business ... so they're doing more side by side drive throughs ... handheld ordering system ... and so they say they have more potential of the last one of the things in those two about my Jesus to McDonald's it seems to you is that the that that for the interior ... of the ... of this the words seems to you know the up the thing where they are that they have a ... duty to bet more than their competitors and I'm getting a hundred more this year the US every images ... so that's a big effort and ... others are falling anemic ... so many analysts on a conference call were talking about ... how one ... talk about oh and Burger King are making a comeback Burger King is a housewife I am ... I'm so what if they could see more competition and ... people start to follow I give it to start to fall again their footsteps and ... the like Burger King just watch movies and ... snack wraps though the line ... these might ... include in his frothing career but she you know we can talk to him ... is the end of our programming half an hour but not the end of our programming day comeback in you see Wendy Bounds on Lunch Break ... two big stories here are some off the beaten path travel destinations for you ... might say is a night I was on the making this one is told in a white is a high holiday for marijuana